5 Expensive Mistakes to Avoid When Buying a Business in 2026
Most entrepreneurs walk into Q1 with a "New Year, New Business" mindset. They see a dip in revenue on a P&L and assume they’ve found a "distressed" bargain.
In reality? They’re often just looking at a seasonal cycle they don't understand.
Buying a business in 2026 requires more than just a high-level look at an EBITDA multiple. With the "Gray Tsunami" of retiring Boomers reaching its peak and AI-driven efficiency rewriting the rules of the trade, the margin for error has never been thinner.
Here are the top mistakes we see buyers making this year—and how to avoid them.
1. Misinterpreting Q1 "Slow Season" Volatility
In the Southeast, especially in industries like HVAC or Restoration, Q1 is notoriously quiet.
The Mistake: Evaluating a business based on a "snapshot" of the current slow months rather than a rolling 36-month seasonal trend.
The Fix: Don’t just look at the TTM (Trailing Twelve Months). Look at the SAAR (Seasonally Adjusted Annual Rate). A quiet January isn’t a red flag; it’s the perfect time to conduct due diligence so you can own the revenue ramp-up that begins in Q2.
2. The "AI Gap" in Operations
By 2026, a business that hasn’t integrated basic AI for scheduling, customer routing, or automated follow-ups is technically "behind."
The Mistake: Paying a premium for a business with bloated administrative costs that should have been automated years ago.
The Fix: Look for the "Automation Upside." If an HVAC shop is still using whiteboards and manual dispatch, you aren't just buying a business; you’re buying a massive opportunity to increase margins through tech modernization.
3. Underestimating Post-Close Working Capital
Many buyers exhaust their liquidity on the down payment and SBA fees, forgetting that the Q2 "thaw" requires a massive cash injection for inventory and seasonal hiring.
The Mistake: Not negotiating a "Working Capital Peg" that accounts for the seasonal ramp-up.
The Fix: Ensure the deal structure includes enough dry powder to survive the Q1 trough and fund the Q2 peak. At Atlantic Coast, we advocate for a "consultative valuation" that looks at the cash-flow cycle, not just the purchase price.
4. Falling for "Lifestyle" Over "Ledger"
The Southeast is beautiful, and buying a coastal CNC shop or a mountain-based landscaping firm sounds like a dream.
The Mistake: Emotional buying. Buyers often overlook "Owner Dependency." If the business only runs because the current owner has a 30-year relationship with three key vendors, the business is a "job," not an asset.
The Fix: During due diligence, ask: "What happens if the owner goes to Tahiti for 60 days?" If the answer is "everything stops," the valuation needs to be adjusted for risk.
5. Relying on "Generalist" Advisors
A real estate attorney or a standard tax CPA is great for their specific fields, but M&A is a different beast.
The Mistake: Using a broker who just wants to "close the deal" rather than an advisor who wants to "protect the transition."
The Fix: Partner with specialists who understand lower-middle market nuances ($2M–$20M). You need someone who speaks the language of SDE (Seller’s Discretionary Earnings) and Recast Financials.
Buying a business is likely the largest financial commitment of your life. Don't let a seasonal dip or a lack of transparency lead to a seven-figure mistake.